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Bitcoin - Part 2

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Donal said:
I don't think Bitcoin itself will ever gain wide acceptance as a currency. However, I do see cryptocurrency becoming widely accepted, provided some central banking institution is behind it.
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Is anonymity still an important characteristic of Bitcoin, and if so how does that fit in with it being behind a central banking institution?
 
Just curious - does anyone here actual hold much in bitcoin ? I mean serious savings amount and not just a few $k ?

I have a feeling that BTC is more interesting to talk about than it is practical to use.

I've never used it.
 
stevea said:
Just curious - does anyone here actual hold much in bitcoin ? I mean serious savings amount and not just a few $k ?

I have a feeling that BTC is more interesting to talk about than it is practical to use.

I've never used it.
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I have a friend who has about 35,000 BTC. When it was trading higher than an ounce of gold, it was a serious chunk of change.
 
Tippit said:
I have a friend who has about 35,000 BTC. When it was trading higher than an ounce of gold, it was a serious chunk of change.
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So now that the value of his bitcoins has gone down to $14 million US dollars, that's not a serious chunk of change?
 
jhunter1163 said:
The "value" of his BTC isn't anything close to $14 million. There's no way he could get anything approaching that much money out of them, unless he accepts hacked Starbucks cards.
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Why couldn't he sell them on an exchange? Take a look at this volume chart...

https://bitcoinaverage.com/charts#USD-volumes-1m

Most days see more than 10,000 bitcoins traded for USD, sometimes more than 30,000 bitcoins. The 30th of August saw more than 70,000 bitcoins traded for USD in a single day.

Although, that's the combined volume for a whole bunch of different exchanges, but there shouldn't be a problem if he gradually sells them off in a couple of different exchanges over several months.

Hell, if he's willing to sell them cheap to get some quick cash he shouldn't have a problem. Take a look at this market depth chart for the Bitstamp exchange...

http://bitcoincharts.com/markets/bitstampUSD_depth.html

From what I see, if he's willing to accept $340 for them, he could sell 10,000 bitcoins straight away for an instant $3.4 million, and still have 25,000 bitcoins left.
 
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Brian-M said:
Why couldn't he sell them on an exchange? Take a look at this volume chart...

https://bitcoinaverage.com/charts#USD-volumes-1m

Most days see more than 10,000 bitcoins traded for USD, sometimes more than 30,000 bitcoins. The 30th of August saw more than 70,000 bitcoins traded for USD in a single day.

Although, that's the combined volume for a whole bunch of different exchanges, but there shouldn't be a problem if he gradually sells them off in a couple of different exchanges over several months.

Hell, if he's willing to sell them cheap to get some quick cash he shouldn't have a problem. Take a look at this market depth chart for the Bitstamp exchange...

http://bitcoincharts.com/markets/bitstampUSD_depth.html

From what I see, if he's willing to accept $340 for them, he could sell 10,000 bitcoins straight away for an instant $3.4 million, and still have 25,000 bitcoins left.
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This has been a major objection of mine all along; the lack of liquidity in the BTC system. There's probably not $14 million in fiat in the system among all of the exchanges. So this guy's $14 million is a paper fortune; even worse, it's virtual paper and could easily evaporate entirely.
 
Belz... said:
That does not counter what JHunter said. How can you liquidate those BTC ?
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Uh, there were ~90,000 BTC transacted in just the last 24h, and the market cap is just under $6 billion. I'm not going to bother to link to the stats, you can look them up. Clearly the market is deep enough for him to liquidate his BTC, just not all on one day.
 
Tippit said:
Uh, there were ~90,000 BTC transacted in just the last 24h, and the market cap is just under $6 billion. I'm not going to bother to link to the stats, you can look them up. Clearly the market is deep enough for him to liquidate his BTC, just not all on one day.
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How many of those transactions were BTC to USD, and how many were BTC to BTC?
 
Tippit said:
https://blockchain.info/charts/estimated-transaction-volume-usd

So, the USD volume has been hovering around $50 million a day. Divide that by the USD price to get the BTC volume. Why would anyone trade bitcoin for bitcoin, what kind of transactions are you talking about?

Bitcoin may or may not be in a bubble, but you are living in a bubble.
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IIRC about one-quarter of all BTC transactions are on a single gaming site. On that site, you bet BTC and win BTC. No USD ever changes hands. There's also the illegal trade; obviously, no one knows how large a market that is, but again, no USD is changing hands.

I would be very surprised if any significant amount of BTC is being redeemed for cash simply because it's so difficult to do it. eBay and Overstock accepting BTC is great news for BTC holders; they can use their BTC there, get some value for their money, and wash their hands of the whole thing.

I'm curious as to how soon Coinbase is required to pay eBay and Overstock their USD. I can't imagine it's very long.
 
jhunter1163 said:
I would be very surprised if any significant amount of BTC is being redeemed for cash simply because it's so difficult to do it.
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What exactly do you call significant? I pointed out in my last post that most days see more than 10,000 bitcoins being redeemed for cash. Is $4 million a day not significant?

jhunter1163 said:
eBay and Overstock accepting BTC is great news for BTC holders; they can use their BTC there, get some value for their money, and wash their hands of the whole thing.
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I somehow doubt it'd be more convenient for a person to spend hundreds of thousands or even millions of dollars in bitcoin on eBay than it would be to simply trade the bitcoin directly for cash on an exchange.
 
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Brian-M said:
I somehow doubt it'd be more convenient for a person to spend hundreds of thousands or even millions of dollars in bitcoin on eBay than it would be to simply trade the bitcoin directly for cash on an exchange.
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You haven't read up too much on the adventures people have had in trying to get their money out of exchanges, have you?
 
jhunter1163 said:
Oh, come now. This is a skeptics' site. Surely you didn't think I would be unable to back up my assertion?

And, actually, I understated the percentage; according to this article, gambling represents almost half of all BTC transactions.

http://arstechnica.com/business/201...-for-almost-half-of-all-bitcoin-transactions/
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You really should learn to read past the headlines. The devil is in the detail and never the twain shall meet.

Based on the number of bitcoin transactions, the article calculates that for the month of June 2013, transactions involving satoshi dice account for 25% to 50% of that number. Even then, that would assume that multiple destination transactions where satoshi dice is one of them are counted solely as a satoshi dice transaction.

However, when you include the number of bitcoins per transaction, you get a very different story.
Still, SatoshiDice transactions tend to be smaller. If you look at average daily transaction volume for June, SatoshiDice only constitutes 5 percent of daily Bitcoin transaction volume.
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The article tries to bolster that figure by including bitzino (which reported "that 3.2 million wagers were made in the second half of 2012"). Of course this doesn't wash since a single bitzino deposit can result in many wagers - especially if the gambler is lucky.

So yes, 50% is a made up "fact". The only difference is that you aren't the one who made it up. You just uncritically took a headline as gospel.

jhunter1163 said:
You haven't read up too much on the adventures people have had in trying to get their money out of exchanges, have you?
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MtGox died therefore ALL bitcoin exchanges have difficulty cashing out withdrawals?

Seriously, a rock could come up with better critical thinking than you do.
 
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psionl0 said:
You really should learn to read past the headlines. The devil is in the detail and never the twain shall meet.

Based on the number of bitcoin transactions, the article calculates that for the month of June 2013, transactions involving satoshi dice account for 25% to 50% of that number. Even then, that would assume that multiple destination transactions where satoshi dice is one of them are counted solely as a satoshi dice transaction.

However, when you include the number of bitcoins per transaction, you get a very different story.
The article tries to bolster that figure by including bitzino (which reported "that 3.2 million wagers were made in the second half of 2012"). Of course this doesn't wash since a single bitzino deposit can result in many wagers - especially if the gambler is lucky.

So yes, 50% is a made up "fact". The only difference is that you aren't the one who made it up. You just uncritically took a headline as gospel.


MtGox died therefore ALL bitcoin exchanges have difficulty cashing out withdrawals?

Seriously, a rock could come up with better critical thinking than you do.
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All right then. Show me an exchange where I can cash out 10,000 BTC in 24 hours. If you can, I will withdraw my assertion.

ETA: If I had $4.2 million in my Scottrade account, I could have a cashier's check in my hand in 24 hours if I wanted. Just sayin'.
 
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